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Cabot Credit Management Announces Financial Results for the 9 months ending 30 September 2015

Cabot Credit Management, a market-leading acquirer and manager of consumer debt, today announced the financial results for the nine months ending 30 September 2015.

“We have demonstrated strong productivity through the nine months to 30 September 2015.  Adjusted EBITDA has grown by 14% to £145.5 million, which is up from £128.0 million in the corresponding period in 2014,“ said Ken Stannard, Chief Executive Officer. “Our strong growth was aided by the addition of dlc and Mortimer Clarke Solicitors to our group, and in October we continued that momentum by completing the acquisition of a contingent collections platform in Spain, Gesif. We also acquired a number of Spanish portfolios, representing a significant step in our plans for European expansion.

“On 11 November 2015, the group issued €310 million of floating rate notes at a coupon rate of 5.875% above Euribor. The proceeds have been used to repay the bridge facility utilised for the acquisition of dlc, and to pay down the existing RCF, therefore providing the group with substantial funds for further portfolio and corporate acquisitions.   

“Also during this period we won two prestigious awards at the annual Credit Excellence Awards, the first for Compliance and the second, through our law firm, Mortimer Clarke Solicitors, for Legal and Enforcement.”

Highlights

Sustained growth for Cabot Credit Management (CCM)

·         120-month Estimated Remaining Collections (ERC) increased 21% to more than £1.9 billion from £1.6 billion

for the same period in 2014

·         Debt purchase collections increased 25% from £178.9 million to £222.7 million compared to the same period in 2014.  Adjusted EBITDA increased 14% from £128.0 million to £145.5 million compared to the same period in 2014.

·         Although the market is very competitive, £246 million of purchases, including the dlc portfolio , have been committed for 2015 enabling CCM to achieve its full year purchasing target ahead of the expected timing.

Business strategy and operations

·         Completed the transition of all debt purchase operations to the same collections platform  and the optimisation process is now underway

 

·         Footprint in continental Europe established with the purchase of Spain-based Gesif.

 

·         The process for applying the Marlin non-paying accounts strategy to the dlc back book of accounts is underway. The equivalent activity on the Cabot back book continues to exceed the expectations set at the point when Cabot and Marlin joined.

Regulatory update

·         FCA visited CCM on 10 November, and we await detailed feedback.  However, no significant issues were raised during the visit

 

Key financial results

 

Nine months September 15

Nine months September 14

% Change

 

 

 

 

Adjusted EDITDA                                 

£145.5m

£128.0m

14%

 

 

 

 

120 month Estimated Remaining Collections (ERC)

£1.9m

 

£1.6m

21%

Debt Purchase Collections                  

£222.7m

£178.9m

25%

Debt Purchase Collections Plus Servicing Income 

£236.2m

£191.1m

24%

Portfolio Purchases                             

£245.7m

£185.7m

             32%

 

 

 

 

Teleconference

At 14:00 hours (GMT) on 26 November 2015, Cabot Credit Management will hold an audio conference presentation on the company’s performance.  For further details, please visit the Cabot investor website atwww.cabotcm.com/investors.

Cabot Credit Management is a market leader in debt purchasing, contingency collections, and customer tracing, and is divided into six specialty businesses: Cabot Financial, Cabot Financial Ireland, Apex Credit Management, dlc, Mortimer Clarke Solicitors and Gesif.

As of 30 September 2015, the combined Cabot Credit Management group has invested £1.7 billion in acquiring portfolios with a Face Value in excess of £16.0 billion. CCM has an ERC (estimated remaining collections) of £1.9 billion. It manages in the region of £1 billion of assets on behalf of clients, collects over £35 million per month on portfolios it either owns or services on behalf of clients, and has delivered a consistently strong financial performance, having grown its business in each of the last 16 years without exception.

The group, which has purchased over 7 million customer accounts, employs approximately 1200 people with offices in Kings Hill, Stratford-upon-Avon, Brackley, Dublin, Worthing, Madrid, and London. The company prides itself on its ethical values, customer service and high standards. It has an impressive list of accolades including:

·         Investors in People Gold and Champion awards

·         Treating Customers Fairly Award 2015, Credit Today

The controlling shareholder of Cabot Credit Management is Encore Capital Group, an international speciality finance company providing debt recovery solutions. The remaining equity is held by a fund advised by J.C. Flowers & Co., in addition to company management.

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